Hormel lifts profit forecast, margins pressured by feed costs

Hormel Foods Corp, the maker of Spam and other food products, raised its profit forecast for the year, encouraged by a strong performance in its grocery division, but said margins will be under pressure due to higher livestock feed costs.

The grocery division, which makes Spam, Dinty Moore Beef Stew and Hormel Chili, has products that do well in an environment where consumers are value conscious, Morningstar analyst Kenneth Perkins said.

Perkins said the addition of new products like cheesy pasta also helped growth in the division, which contributed about 16 percent of the total sales in the quarter.